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Refractories Review: Industry Snapshot

January 11, 2006
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The refractories industry continues to evolve in response to the many changes caused by globalization-especially the associated major increase in competition. Some other significant factors of concern are the decreasing refractory consumption rate by user industries, increased raw material and energy costs, and, of course, the "China Factor," which is impacting all people and industries worldwide.

Table 1.

Market Value and Production

It is estimated that the global production of refractories was 28-30 million metric tons (mmt) in 2004, with a total value of $14-16 billion. China is by far the world's largest producer of refractories (18.7 mmt in 2004) and steel, and its annual output has risen at an unprecedented rate (see Figure 1). By comparison, refractories production in the U.S. and Japan in 2004 was 2.5 and 1.05 mmt, respectively (see Table 1). In 2004, with the commodities boom, there were positive signs in the U.S., with increased refractory production (3%) and market value (7%), while Japan saw decreased production (-7%) and increased market value (8%).

It's been predicted that the turnaround in U.S. refractory demand will continue, with an expected 1% annual increase until 2009.1,2 Steel production worldwide exceeded 1 billion metric tons (bmt) in 2004 (1.05 bmt) for the first time in history3, and production is expected to increase to about 1.1 bmt in 2005. Because the steel industry is the major user of refractories, the increasing production bodes well for the refractories industry. However, the situation is definitely better in some regions than others. For example, steel production in 2005 is projected to continue increasing in China (by at least 25%) and India (12%), while decreasing in Europe (down 1-2%) and the U.S. (-3%). The Pacific region now produces ~53% of the world's steel.

Table 2.

Price and Use Trends

The use of monolithic refractories (i.e., castables, plastics, gunning mixes, etc.) continues to increase compared with bricks/shapes as a result of continued improvement of the products, advances in installation/repair, environmental benefits, and cheaper relative price.4,5 For example, the average price of bricks/shapes in the U.S. in 2004 was $972/metric ton, compared with $623/metric ton for monolithics. In Japan and the U.S., monolithic refractories constitute about 65% and 53% of total production, respectively. In China, monolithic production is probably less than 30%, but it is continuously increasing. Although monolithics dominate refractory production, it should be noted that bricks/shapes accounted for 62%, 55%, and 51% of the annual market value in Japan, S. Korea, and the U.S., respectively, in 2004.

In Japan, the highest usage of monolithics is in incinerators and the lowest is in cement kilns (see Table 2). In most industries, the usage of monolithics is increasing, but it should not be interpreted that monolithics are a cure-all. Bricks/shapes still perform best in some applications. c

References

1. "Refractory News," The Refractories Institute, August 2005, Pittsburgh, Pa., www.refractoriesinstitute.org.

2. Freedonia Group, Cleveland, Ohio, 8/2005, www.freedoniagroup.com.

3. International Iron & Steel Inst., www.worldsteel.org.

4. U.S. Bureau of Census, Current Industrial Reports - Refractories MA327C.

5. Annual reports of Japan Refractories Association, Tokyo.



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